Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:В.1
Birdie Limited is a manufacturing company producing a variety of golf clubs. It
operates from one factory that is geographically separated from its head office. The
components for the clubs are assembled in the assembling department; they are
then passed through to the finishing department where they are painted and packed.
There are three service cost centres: administration, stores, and manufacturing
support. The following costs were collected for the year to 31 May 2021:
Department
Allocated cost centre
overhead costs (£,000)
225
Number of
employees
67
Assembling
Finishing
Administration
60
134
300
89
120
84
Stores
17
Manufacturing support
34
Additional information:
The allocated cost centre overhead costs are all considered to be indirect costs
as far as specific units are concerned.
During the year to 31 May 2021, 208,000 machine hours were worked in the
assembling department, and 270,000 direct labour hours in the finishing
department.
During the year to 31 May 2021, the stores department received 75,000
requisitions from the assembling department, and 50,000 requisitions from the
finishing department. The stores department did not provide a service for any
other department. Stores costs can be apportioned using the number of
requisitions.
Administration costs can be apportioned on the basis of employees.
The manufacturing support department carried out 17,000 chargeable hours for
the assembling department, and 9,000 chargeable hours for the finishing
department. The manufacturing support department did not provide a service
for any other department. Manufacturing support costs can be apportioned
using the number of chargeable hours.
100 special clubs were produced during the year to 31 May 2021. They took 61
machine hours of assembling time, and 134 direct labour hours were worked on
them in the finishing department. Their total direct costs (material and labour)
amounted to £2,750.
Transcribed Image Text:b)
Calculate the total cost of production of the special clubs?
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